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GXY- to buy or not to buy?, page-42

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Facthunter

11,460 Posts.

815

25/04/17

08:59

Post #: 24247929
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Originally posted by Lomu ↑

Nearly 8am here- toast and coffee going down like a treat and I've had some time to mull over my position on GXY.

I'm leaning ever so slightly to the 'buy' side. Not totally convinced yet so I'm still keeping my powder dry. I'd just like to lay out a few of my random thoughts on this, so do bear with me if you can.

Obviously, we all want to be a part of the next big thing. If you'd stuck your money in Apple or Tesla a few years ago you'd be laughing all the way to the bank. Literally! So here's what I'm thinking: is Lithium the next big thing?

We all know about Tesla. Hyundai do electric cars, as do Chevy. Audi and Nissan. Volvo's got one coming. Toyota use hybrid drivetrains. And so on. So obviously there's a lot of demand for battery power there- and what goes into batteries? Lithium!

Now I know there's many different sorts of batteries but the one thing they all have in common is their use of lithium. So no matter who manufactures the car, they simply have to get their hands on lithium. Obviously that's a good thing- supply and demand naturally. But I worry that GXY might not be a big enough player to swim in the pool with the big boys. I really do think that they need to expedite their SDV facility as much as possible.

But on the flipside. Perhaps I'm being pessimistic? If the demand outstrips supply, then the price of lithium surely has to go up? And in that case, you'd think that GXY will do well regardless. They do appear to be the no.1 producer in Australia so surely that has to be a big advantage. Lithium mines don't just appear overnight obviously so I do think they have a definite 'first mover' advantage in this space.

Just some random thoughts. Here's another couple:

- a spot price for Lithium being traded on international markets would be good but I don't think such a beast exists just yet.

-Would GXY be seen as a takeover target? They have the facilities, and mines. They're shipping cargoes and they have more facilities to bring online. Surely a big Chinese conglomerate would have its eyes firmly fixed on this space?

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You would have to ask when and how did AT arrive on the seen to answer that question.

GXY Price at posting: 42.5¢ Sentiment: Hold Disclosure: Held
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